Solar gardens could deliver major savings for “locked out” consumers

Australia could see the development of its first “solar gardens” as early as 2019, after a major report found the shared solar model not only feasible, but able to knock hundreds of dollars off the annual cost of electricity for consumers previously locked out of the rooftop PV market.

The resulting report is a 52-page document put together by teams from both the Institute of Sustainable Futures (UTS) and the not-for-profit Community Power Agency, which has worked tirelessly to ensure that the benefits of renewable energy are extended to all consumers.

As we have reported on One Step before, this is a major nut to crack for both governments and the industry, with more than half of residents of major cities like Sydney found to be “locked out” of solar – many of the sort of low-income consumers who could use the benefits of cheap PV more than most.

And – as we have also reported – there are a number of ways that governments and companies are addressing this issue, including innovative tech and software solutions from outfits like SunTenants, and Allume Energy.

The purpose of this report, however, was to assess the feasibility of using solar gardens – a centralised solar power station that offers “locked out” energy users the opportunity to purchase or buy a share of PV panels, with the electricity generated credited on their electricity bill.

It’s a type of shared solar that has yet to take hold in Australia, but has been big in the US, with 387MW of community solar projects installed nationally in 2017 – a doubling of the amount installed the year before, which took the cumulative total to 734MW.

A great deal of that capacity has been installed in states like Minnesota and Massachusetts, where policies supporting solar gardens are the most advanced.

And that is a key finding of the Australian report, which essentially concludes that solar gardens are possible, in demand, and offer major benefit to both consumers and the PV industry alike – but only with the right policy support.

“The impetus behind this project was that lots of people like the idea of solar gardens but there were so many unknowns that we didn’t know if we could do it,” said the CPA’s Nicky Ison, one of the report’s authors.

“The upshot of this report now is that, yes, we can do it, but there is still some work to be done.”

A great deal of the hardest work has been done by the teams of more than 20 partners in Queensland, NSW and Victoria involved in the Social Access Solar Gardens Project, including costing analysis, and legal templates developed by Norton Rose Fulbright.

And off this back of research, four out of the five project teams are actively developing pilot solar gardens initiatives – two of which Ison says could get up within the next year, and two which will probably take a little bit longer.

But all four of the pilot projects, and the future of solar gardens in general, will depend largely on the development of supporting policy, and – of course – on funding.

That’s because – much as was the case with rooftop solar just a decade ago – the cost of developing a mid-scale (between 1MW and 10MW) community solar garden don’t quite yet stand up on their own merits.

This is not due to the cost of the technology which, as we well know, is getting ever cheaper; but comes down to prohibitive legal and administrative costs that communities already unable to access solar are unlikely to be able to overcome on their own.

And so, just as targeted policy and subsidisation have helped deliver a world-leading rooftop solar uptake in Australia, the right kind of policies and tariff arrangements – namely virtual net metering – in the US have made community solar one of the fastest growing sectors in that market.

“(Australian) governments have a long track-record of supporting household solar, from federal rebates to feed-in tariffs, to the current schemes in NSW, Victoria and South Australia,” says Jay Rutovitz, Project Director from the UTS Institute for Sustainable Futures and another lead author of the report.

“If similar support was provided to Solar Gardens customers they would see average bill savings of between $290 and $370 every year.”

And, Ison notes, support for Australia’s locked out energy users could also help to unlock a new PV sector.

“We have lots of rooftop solar, lots of large solar farms, but we’ve only got a handful of projects in that 1-5MW range. It’s a massive gap in our renewables industry.

“There are lots of paces where you can connect a 1-5MW solar system on the grid.”

So what must be done to get solar gardens up and running in Australia?

“We see that there’s three pieces of work that need to be done,” says Ison. “The first is that we need to get pilot solar gardens off the ground.

“The second thing is, if these are going to work at scale, it means a government program to support them.”

According to the report, returns on full cost solar gardens – unlike those for rooftop solar – are “unlikely to be sufficient” to make the investment worthwhile for customers.

Compared to rooftop solar, for instance, which the report found to have a simple payback of around five years, full-cost shares in solar gardens were estimated to have simple paybacks of 10-16 years.

“From a business case perspective , if you can put solar on your own roof, you should,” Ison says.

But for those who can’t, a subsidised solar garden is one of the next best things.

The report found a subsidy of $2,400 – $4,300 per household delivered sufficient return to make Social Access Solar Gardens a viable option for all locked out consumers.

And as Ison and Rutovitz both note, that amount is not so different to subsidies currently being offered by various state governments to further encourage the uptake of rooftop PV and to boost the rollout of home battery storage.

“We think that is entirely reasonable, given the amount of support that has been given to other parts of the industry, not to mention the coal industry,” Ison told RE on Thursday.

“If similar support was provided to solar gardens, all consumers would be able to also access the benefits.”

The third piece of the puzzle, Ison says, is setting up the organisational infrastructure for solar gardens for scale.

And she says the markets in NSW and Victoria were looking particularly promising, with the groundwork laid down by the project organisations, and a number of existing policies offering potential to be adapted to make solar gardens viable.

“It’s really good to see the Victorian government commitment to doing a pilot for (solar for thousands of) renters. We now need to have a conversation about whether this should be restricted to rooftop.”

One response to “Solar gardens could deliver major savings for “locked out” consumers”

What are the legal and accounting costs that are such a burden? Why are they such a burden ? Do we really need to support the accounting and legal parasites that do very little work but demand such a large slice of the pie